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Banking on Detroit’s African American Communities

Michigan Chronicle
Donald James
May 30, 2022

The historical denials of financial inclusion and equity for Black Americans are long-running nightmares that have plagued Black communities for more than 50 years.  Even before the Civil Rights Act in 1964, there were consistent implementations of Black Codes, Jim Crow Laws, and other exclusionary policies and practices concocted by White financial institutions – rooted in racism – to deny Black people fair access to banking and financial needs. As a result, the racial wealth gap in America has widened for Black people, punctuated in large by the same exclusionary tactics aimed at Black communities for a long time.     

Yet, in the aftermath of George Floyd’s murder in May 2020 and the associative tailwinds of the social and civil unrest that followed, there appears to be a seismic shift in how banks and other financial institutions currently interface with African American communities across the nation. 

Of course, Black-owned banks have long been at the vanguard of helping African Americans and their respective communities. Nevertheless, the number of Black-owned banks has dwindled precipitously. Black historians report that between 1888 and 1934, there were 134 Black-owned banks in America perched to help Black communities.  Today, according to the Federal Deposit Insurance Corporation, there are only about 17 African American-owned and controlled banks out of approximately 5,000 banks across the nation.   

In Detroit, First Independence Bank, Michigan’s only Black-owned bank headquartered in the state, has continued to make a difference in Black communities across the city and Southeast Michigan. First Independence initially opened its doors on May 11, 1970, approximately three years after the Detroit Riots.   

“Our success always has to be a reflection of the community’s success,” said Kenneth Kelly, First Independence’s chairman and chief executive officer.  “And the city of Detroit and the citizens of Detroit have been extremely supportive of this institution since its beginning in 1970. That has helped us be successful and weather the storm. We are very fortunate to sit in the seat that we are in and hopefully continue the mission of being a beacon for wealth accumulation and capital in the African American community.” 

Kelly said that First Independence focuses on many areas that can be helpful to the African American community in Detroit, including commercial and residential real estate lending, hard asset lending, and financial literacy.  Kelly also spoke about programs to help African Americans that are unbanked and underbanked. 

In April 2022, First Independence held the grand opening of its expansion to Minneapolis, Minnesota, where the financial institution opened the city’s first Black-owned bank, almost two years after George Floyd’s murder. Kelly said First Independence’s major expansion to Minnesota didn’t happen in a vacuum; it was with 18 months of planning and the support of megabanks, including Wells Fargo, Bremer Bank, Huntington, Bank of America, and U.S. Bank.   

“We are hopeful that our presence there will be meaningful to the African American community,” Kelly said. “We’ve hired and trained our entire team members from Minneapolis to work there because we wanted to support that community by creating jobs for people living and raising families there.”  

Following Floyd’s murder, other banks made commitments to address social, racial, civil, economic-financial and police injustices. PNC Financial Services Group, headquartered in Pittsburgh, Pennsylvania, announced its commitment of more than $1 billion to support the economic empowerment of African Americans and low-and-moderate-income communities. 

“We are living in one of the most important civil rights movements of our time,” said William S. Demchak, chairman, president, and chief executive officer of PNC Financial Services Group. “Each of us has a role to play in combating racism and discrimination, and PNC is committed to driving real change in areas where we can make the greatest impact.” 

In Detroit and throughout Southeast Michigan, where PNC has a significant presence, the bank has implemented programs and initiatives to help eliminate systemic racism, promote social justice, advance workforce development initiatives, and expand financial education in African American communities. 

“Our work in Detroit, Flint, Ecorse, and other cities has been ongoing for decades to help inner-city communities,” said Michael Bickers, PNC’s regional president for Detroit and Southeast Michigan. “We are eager to do and take care of the people. When we announced the Community Development Plan across the country, it represents $88 billion in loans, investments, and other support to low- and moderate-income families.” 

Bickers, a native Detroiter and African American, said there are currently between 15 and 17 programs in the city that PNC’s name is attached to in some manner.  

“We spend or invest millions and millions of dollars each year, either through PNC’s own programs, initiatives, products, and services, or in partnership with other organizations to empower families, children, and communities because we know we are making lives better for people.”   

Bickers points to PNC’s ready-to-launch Minority Business Development Group initiative to support Black and other minority-owned businesses in Detroit, Southeast Michigan, and nine other areas across the country. Led by Marshalynn Odneal, national sales executive for Minority Business, the initiative’s goal is to deliver products, solutions, and resources focused on advancing the financial wellness of emerging minority businesses.   

Last year, PNC introduced its Mobile Branch that provides underbanked neighborhoods in Detroit access to banking services. And PNC and The Kresge Foundation have partnered to finance a $57.3 million project to convert the Liberal Arts and Immaculate buildings on the Marygrove Conservancy campus on Detroit’s west side into K-12 facilities. 

Comerica Bank, once headquartered in Detroit before moving to Dallas, Texas, continues to do great things to assist the growth of African American small businesses across the nation and  Motor City. In May 2021, Comerica announced a three-year, $5 billion commitment to Small Business Lending. Eleven months earlier and less than a month after Floyd’s murder, Comerica Bank announced a $1 million commitment over four years to the National Business League (NBL) to facilitate the financial resources and technical support for the development and launch of an innovative Black Capital Access Program.   

“Capital access remains the most important factor limiting the establishment, expansion, and growth of Black-owned businesses,” said native Detroiter Dr. Ken L. Harris, president and chief executive oficer of the National Business League, Inc., which maintains a regional office in Detroit. “As part of the organization’s mission to eliminate institutional, structural, and systemic barriers to capital, it is important to develop public and private partnerships to address the financial burdens on Black entrepreneurs who are trying to keep their businesses thriving in today’s economy, especially in response to the COVID-19 pandemic.” 

There is still room for banks to do more to empower Black and Brown communities, such as offering fair and better financial services regarding lending, house mortgages, and financial literacy. And more must be done to empower the unbanked and underbanked citizens of color to “move beyond” using cash checking and payday loan institutions as their financial institutions of choice.    

“Banking, in general, has been challenging for our Black community,” said Kelly. “Statistics show that one out of five African Americans in Detroit do not have a bank account. So we are unbanked and underbanked culturally. That’s a problem. For banks like ours, we hope more African Americans will get into the banking system and move away from being unbanked and underbanked, which is expensive in the long run.  And it keeps them, in many ways, from realizing the American dream.”  

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